Uniform Securities Agent State Law (Series 63) Practice Exam

Who is considered an associated person of a member broker/dealer?

1. Any person who has not been registered with the state

2. Any individual controlling or controlled by the member broker/dealer

3. Anyone who engages in securities transactions occasionally

4. Individuals with more than $100,000 in investments

The correct answer is: Any individual controlling or controlled by the member broker/dealer

An associated person of a member broker/dealer is defined as any individual who is either controlling or controlled by the member broker/dealer. This definition encompasses a broad range of individuals who perform various functions for the broker/dealer, including but not limited to those engaged in sales, supervisory roles, or other operational capacities. The relationship of control is fundamental in determining whether someone qualifies as an associated person, as it indicates a significant degree of influence over the activities of the broker/dealer. The other choices do not correctly capture the definition of an associated person. Not being registered with the state does not determine whether an individual is associated with a broker/dealer, as there are many factors contributing to a person's association. Engaging in securities transactions on an occasional basis does not imply a formal relationship or connection that meets the criteria of being an associated person. Lastly, the amount of investments held by individuals is irrelevant to their association with a broker/dealer, as this characteristic does not pertain to control or a formal working relationship with the firm.